Brookdale Senior Living: Are Its Thematic Tailwinds Enough To Earn A Buy Rating?

Brookdale Senior Living: are its thematic tailwinds enough to earn a buy rating?

One of the great things about thematic investing is there is no shortage of confirming data points to be had in and our daily lives. For example, with our Connected Society investing theme, we see more people getting more boxes delivered by United Parcel Service (UPS) from Amazon (AMZN) and a several trips to the mall, should you be so inclined, will reveal which retailers are struggling and which are thriving. If you do that you’re also likely to see more people eating at the mall than actually shopping; perhaps a good number of them are simply show rooming in advance of buying from Amazon or a branded apparel company like Nike (NKE) or another that is actively embracing the direct to consumer (D2C) business model.

While it may not be polite to say, the reality is if you look around you will also notice that the domestic population is greying. More specifically, we as a people are living longer lives, and when coupled with the Baby Boomers reaching retirement age, it has a number of implications and ramifications that are a part of our Aging of the Population investing theme.

There are certainly the obvious issues related to this demographic shift, such as whether or not folks have enough saved and invested well enough to support themselves through increasingly longer life spans. And then, of course, there is the need of having access to the right healthcare to deal with any and all issues that one might face. That is something that shouldn’t be taken for granted, given the national shortage of nurses and health care professionals we are currently experiencing, and the reason why one AMN Healthcare Services (AMN) has been on the Tematica Investing Select List in the past.

But our Aging of the Population theme doesn’t stop there. Again, much like looking around at what people are doing at the mall, all one has to do is sit back and assess the day-to-day life of a typical octogenarian and see that we are seeing:

  • A shift in demand for different types of housing as seniors give up on the homestead and move into easier to maintain condos and townhouses.
  • An even greater focus on online retailers that will deliver purchases directly to the home, rather than having to go out and carry purchases from the store to the car and then into the home. Also driving this shift will be younger children making purchases for their aging parents and having them shipped directly to their home.
  • Fountain of Youth goods and services will be in even higher demand as Baby Boomers will not let go of their youth easily.
  • And finally, technology and services that will help maintain independence— we’re talking about robots, digital assistants, monitoring equipment and even things such as the autonomous car.
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The following article is an excerpt from Tematica Investing, our cornerstone research publication. Tematica Investing includes original investment ideas and strategies based upon our proprietary ...

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